Raises are nice, but.....

[anonymous]

bottom line they will cost reps money in the long run. This was a cost cutting measure to be sure. Don't get me wrong, not exactly complaining here, but if you do the math you will quickly discover that TIP costs of 8% on average grow larger each year because our salaries go up roughly 2.5% with merit increases, so the fantastic compounding effect (brilliant design by the original team of executives) was put to bed by Ramona and company. Our TIP is now gone forever and essentially "locked in" to our current salary based on this years calculation.

Impact? You can draw it out and do the math, but you have to realize what a great sales job this was by Ramona and company, "look at all this money you get right now". Truth be told it TAKES AWAY money from you as each year goes on when compared to our old TIP payout.

Real world, they could have just ended it and we got nothing! So I'm not exactly complaining, I'm Just Sayin!

 

[anonymous]

Did you really think that Takeda would do anything that benefits the average employee?
Every decision made you can guarantee that in the end it will put less money in your pocket and put more back into the mothership.Nuff said. end. period. This is the new Takeda. Management attitude is you should be grateful to have a job, leave if you are unhappy.

Just sayin

 

[anonymous]

Bottom line in the short term it benefits the employee. Remember our bonuses are taxed at a really high percentage. In the Long run it benefits the company. Either way an 8% raise is a good day.

 

[anonymous]

Bottom line in the short term it benefits the employee. Remember our bonuses are taxed at a really high percentage. In the Long run it benefits the company. Either way an 8% raise is a good day.

Bonuses are not taxed any different than ordinary income (box 1, wages, tips, etc). I believe you are referring to the higher withholding amount of roughly 39.5% on bonuses. In the end, this larger withholding amount helps you get a refund. Most folks who pull in less than 200K wind up paying around 15% of their gross income.

 

[anonymous]

Bonuses are not taxed any different than ordinary income (box 1, wages, tips, etc). I believe you are referring to the higher withholding amount of roughly 39.5% on bonuses. In the end, this larger withholding amount helps you get a refund. Most folks who pull in less than 200K wind up paying around 15% of their gross income.

Bonus and commissions ARE taxed higher then general income; first term of the Clinton administration brought that little gift to the working class. I remember this oh so well.

 

[anonymous]

Bonus and commissions ARE taxed higher then general income; first term of the Clinton administration brought that little gift to the working class. I remember this oh so well.

I'm sorry, but your mistaken. Bonuses and Commissions hit box 1 (Wages, Tips, Other Comp) of your W2 statement the same as all other income from your employer, and thus are ALL added up together and TAXED at your individual tax bracket/rate. Bonuses and Commissions are however WITHHELD at a higher rate than ordinary income. Please be careful not to confuse the WITHHOLDING rate with the actual TAX rate, two very different things. My friend Roy the CPA explains it well.

ROY - CPA
What happens at payroll time is withholding. What happens when you file your tax return determines the actual tax that is paid. That bonus will be taxed at the same rate as your other income, with some adjustment for moving up the progressive scale. If you're effective tax rate is 10% when you file your form 1040, the bonus was taxed at 10%, even though 25% of it was withheld. You get the 15% back in the form of a refund.

 

[anonymous]

I'm sorry, but your mistaken. Bonuses and Commissions hit box 1 (Wages, Tips, Other Comp) of your W2 statement the same as all other income from your employer, and thus are ALL added up together and TAXED at your individual tax bracket/rate. Bonuses and Commissions are however WITHHELD at a higher rate than ordinary income. Please be careful not to confuse the WITHHOLDING rate with the actual TAX rate, two very different things. My friend Roy the CPA explains it well.

ROY - CPA
What happens at payroll time is withholding. What happens when you file your tax return determines the actual tax that is paid. That bonus will be taxed at the same rate as your other income, with some adjustment for moving up the progressive scale. If you're effective tax rate is 10% when you file your form 1040, the bonus was taxed at 10%, even though 25% of it was withheld. You get the 15% back in the form of a refund.

Sorry, I meant to say "you" are mistaken, not "your". Ha, looks like I was mistaken as well!

More good tax explanation on the topic:

Are commissions taxed differently than bonuses in the U.S.? If so, how?
1 Answer
Wray Rives, CPA CGMA
383 Views • Wray is a Most Viewed Writer in Taxes.
No in the US, commissions are included with any other wages when calculating taxable wages and are taxed the same.

However, withholding of income tax on commission income might be calculated different from a standard salary due to the fact that commissions are typically paid on a monthly or quarterly basis resulting in different withholding rates than a standard semi-monthly or bi-weekly salary. But when you actually calculate income tax owed commissions are treated like any other wage.

 

[anonymous]

I'm sorry, but your mistaken. Bonuses and Commissions hit box 1 (Wages, Tips, Other Comp) of your W2 statement the same as all other income from your employer, and thus are ALL added up together and TAXED at your individual tax bracket/rate. Bonuses and Commissions are however WITHHELD at a higher rate than ordinary income. Please be careful not to confuse the WITHHOLDING rate with the actual TAX rate, two very different things. My friend Roy the CPA explains it well.

ROY - CPA
What happens at payroll time is withholding. What happens when you file your tax return determines the actual tax that is paid. That bonus will be taxed at the same rate as your other income, with some adjustment for moving up the progressive scale. If you're effective tax rate is 10% when you file your form 1040, the bonus was taxed at 10%, even though 25% of it was withheld. You get the 15% back in the form of a refund.

Tru dat bra.
Are commissions taxed differently than bonuses in the U.S.? If so, how?
1 Answer
Wray Rives, CPA CGMA
383 Views • Wray is a Most Viewed Writer in Taxes.
No in the US, commissions are included with any other wages when calculating taxable wages and are taxed the same.

However, withholding of income tax on commission income might be calculated different from a standard salary due to the fact that commissions are typically paid on a monthly or quarterly basis resulting in different withholding rates than a standard semi-monthly or bi-weekly salary. But when you actually calculate income tax owed commissions are treated like any other wage.

 

[anonymous]

Here is how the sca... I mean system probably works. While they took away your tip but increased your base pay by 8%, odds are they did not adjust the pay ranges on the jobs. Thus they've essentially grandfathered you in for the premium pay for as long as you hold your current position.

Since the pay ranges haven't been changed new hires will come in without the 8% premium, and if you take a promotion you'll also lose the 8% premium as you'll move into the new pay scale at the entry level as if you were a new hire. On top of this those who remain in their current positions will have a target on their backs in the next round cost cutting exercises or layoffs by virtue of their average salary being inherently 8% higher than their junior counterparts.

So in the short term they've convinced their employees that they didn't really cut anything, while in the long term reducing payroll expenses by 8%.

 

[anonymous]

Here is how the sca... I mean system probably works. While they took away your tip but increased your base pay by 8%, odds are they did not adjust the pay ranges on the jobs. Thus they've essentially grandfathered you in for the premium pay for as long as you hold your current position.

Since the pay ranges haven't been changed new hires will come in without the 8% premium, and if you take a promotion you'll also lose the 8% premium as you'll move into the new pay scale at the entry level as if you were a new hire. On top of this those who remain in their current positions will have a target on their backs in the next round cost cutting exercises or layoffs by virtue of their average salary being inherently 8% higher than their junior counterparts.

So in the short term they've convinced their employees that they didn't really cut anything, while in the long term reducing payroll expenses by 8%.

I see what your trying to say, but I think it's a bit inaccurate. First off, If you move to another job within the company, your not going to take a pay cut, or loose the 8% that was added to your salary regardless of pay scale, that's just stupid and not how it works. Layoffs, maybe and yes higher salaried people are always targeted to a degree.

 

[anonymous]

I see what your trying to say, but I think it's a bit inaccurate. First off, If you move to another job within the company, your not going to take a pay cut, or loose the 8% that was added to your salary regardless of pay scale, that's just stupid and not how it works. Layoffs, maybe and yes higher salaried people are always targeted to a degree.

If the person before you is making $100k a year salary with a 10% bonus, but you hire into the same job right after them at $100k without the 10% bonus because management changed the bonus policy between you and them, it is true that you personally hasn't lost anything because you never had that 10% to begin with, but you're not making the same wage as the person before you thus management saves 10%.

 

[anonymous]

If the person before you is making $100k a year salary with a 10% bonus, but you hire into the same job right after them at $100k without the 10% bonus because management changed the bonus policy between you and them, it is true that you personally hasn't lost anything because you never had that 10% to begin with, but you're not making the same wage as the person before you thus management saves 10%.

Winner winner chicken dinner.

 

[anonymous]

I see what your trying to say, but I think it's a bit inaccurate. First off, If you move to another job within the company, your not going to take a pay cut, or loose the 8% that was added to your salary regardless of pay scale, that's just stupid and not how it works. Layoffs, maybe and yes higher salaried people are always targeted to a degree.

If you think the pay scale is getting moved upwards because of this change you are sadly mistaken. Those scales will be based upon market data, the only time your pay scale will change is if you move into another role.

Also if this raise moves you above the mid point of the range, your potential merit increases start to decrease even if you are a superstar, I.e. you get to work harder for potentially less.

 

[anonymous]

If you think the pay scale is getting moved upwards because of this change you are sadly mistaken. Those scales will be based upon market data, the only time your pay scale will change is if you move into another role.

Also if this raise moves you above the mid point of the range, your potential merit increases start to decrease even if you are a superstar, I.e. you get to work harder for potentially less.

Exactly. And because the system is designed to punish and push out the best workers people become disillusioned and focus on presenting activity instead of achievement. Systems and processes degrade. People become cynical.

 

[anonymous]

Geez? I'm just a lackey who got an 8% pay increase. My DH got a 3% pay increase and he's thrilled.

I'll say it and will be flamed for it, but I'm so joyous to have a job...so here's where the rag whores will scream fowl and spew sulphur for me being such a weak tit.

Listen go ahead but I was unemployed for years before Takeda took me in and offered me a great territory and a substantial salary. I can pay my bills and survive.

You my friends think there is so much more out there, well go ahead and jump ship then proceed to swim. Personally I love being in the boat which YOU think is sinking. So be it? But I have a paycheck in the mean time; BTW what's the alternatives? Uncle Sam? Been there, done that.

 

[anonymous]

During the 2010 and 2012 blood baths, the TIP bonus became a point of contention because people that were let go received a proration of said bonus; did I get right amount, should they count the separation package as part of my eligible salary to compute the TIP. I’d venture to guess that the ERC was swamped with question and claims and so on, this time the company is simplifying the process for the folks that are getting the ax, (which looks that it will me massive) and at the same time saving Japan boats of money in the future. Get ready Boys and Girls or Girls and Boys and all other persuasions in between to be PC.